Gilead Sciences, Inc. (GILD) Earnings Call Transcript & Summary

Awesome. Thank you very much for joining us today. My name is Mohit Bansal. I'm one of the Biotin pharma analyst here at Wells Fargo, and I'm joined by Dr. Dietmar Berger, Gilead's Chief Medical Officer. Thank you very much, Dietmar, for joining us today for the first time.

Thanks for having me.

So Gilead has been a regular. This is fifth year in a row at Wells Fargo Conference, first time for Dietmar, we are excited to have some R&D discussion here. So Dietmar, let's just talk a little bit about the pipeline focus right now. So it does seem like you have a mix of like, obviously, building on HIV, where you have a leadership and then oncology, some data set coming in [ Miraji ] as well. So talk a little bit about -- when you look at the internal portfolio and some of the assets you acquired earlier this year, like where is the focus internally is -- and then what do you see the most exciting stuff out there?

Yes. No, thanks for that question. We're the current management team at Gilead, right, they joined like 7 years ago. And there was a clear realization that we want to diversify and that's been our strategy for some time. And we've clearly highlighted, yes, we are -- we have a clear stronghold in virology and there's diversification in virology as well, and that's important to us. And then there's really this expansion into oncology and into inflammation, right. From a portfolio perspective, we've made good progress in all 3 areas. And Obviously, on the virology side, there's this focus on both HIV treatment and prophylaxis and we can really talk about how that is progressing. For example, we've just launched the combination of bictegravir [indiscernible] as a daily oral for a very specific patient population. That's the big [indiscernible] launch where we've presented data on the [indiscernible] bictegravir combination as a once-weekly oral, but we we're working on longer duration treatment options right all the way up to once every 6-month treatment options. And then we have obviously the prep portfolio HIV prevention portfolio where, for example, we have submitted for the once-weekly lenacapavir. We've launched the ones every 6 months, and we have clinical trials for the one of the 12 months, right? And beyond that, we look more broadly at virology and antivirals as an opportunity. Then in oncology, we have to think about that in 2 ways. One is obviously, the cell therapy portfolio with KITE. That's also one of the acquisitions that you mentioned. That's the Arcellx acquisition that brings a needle cell fully into Gilead, that's where we have strong data in the fourth line plus multiple myeloma setting. We also have a study ongoing in the second to fourth line, and we're also preparing for studies in earlier lines, for example, in the first-line setting. We are hoping for approval in this fourth line plus setting towards the end of the year. We think that's a really important opportunity because we feel a needle cell is very differentiated option. And beyond that, with the KITE portfolio with the CAR T cell portfolio, we're also focusing on next-generation CAR Ts, for example, bispecific CAR T, CD19, CD20. We're also looking at how can we expand that from oncology also into inflammation and neuro inflammation. And we're also working on in vivo CAR T as an option, but that's a longer-term perspective, right, which is important. The current focus and standard of care and that's where also the opportunity is really the ex vivo autologous. And then on the noncellular therapy side, that's where we have another acquisition also. That's where we have the tubules acquisition that brings top 40 into our portfolio, which is ovarian cancer focused. We've had data with a 60% objective response rate at ASCO, which really confirms the underlying concept of a new linker technology, also new payload technology, very stable linker, really confirmed with the strong efficacy and also good tolerability. Of course, early days, but we'll explore that further. And we want to move that rapidly also into Phase III studies in ovarian cancer. And there's a whole portfolio behind that of ADCs from tubules besides that, obviously, we have Trodelvy really meaningful growth rates in breast cancer and also additional data coming, for example, in endometrial cancer, for example, in the adjuvant, triple-negative breast cancer setting and also in small cell lung cancer and a whole slew of cooperative studies beyond that. And in oncology, we're also trying to broaden the portfolio and really focus on tumor drivers, ADCs, somewhat targeted mechanisms with that portfolio, and we're making good progress there. And on the inflam side, and I want to say inflam plus liver side, obviously, have lively as a marketed product, which is also making good headway from a commercial perspective, we had additional data with the IDEAL study, which takes us into an even earlier treatment paradigm. Also thinks more about normalization of ALP values, normalization of liver function, which we believe can give us a better long-term trajectory and which really increases the market size roughly doubles the addressable patient population. And beyond that, we have, on the inflammation side, an array of what I consider really interesting molecules. We have an oral alpha 4 beta 7, where we are looking forward to present data later this year. We have an IRAK-4 inhibitor, which we tested in cutaneous lupus, where we also will present the data later this year. We also have an IL-4 degrader. That's in early studies. We're focusing also on STAT6 degradation. And then the final acquisition I want to talk about is really the acquisition of gamgertamig, which is a BCMA T cell engager which takes us into autoantibody-driven disorders. I think immune thrombocytopenia, think autoimmune hemolytic anemia and other types of autoantibody-driven disorders. So overall, I would argue we have worked heavily on improving the portfolio and thinking about how can we drive further differentiation, patient benefit and then eventually also revenue across the virology portfolio, the oncology portfolio and then also the inflam portfolio. And I'm really encouraged by where we are at this stage and how we can deliver against that.

Very, very helpful. Thank you very much for this overview. There's a lot going on at Gilead. So I want to briefly touch upon the HIV before moving into the pipeline side of things. So I think even the HIV as well pipeline. Talk a little bit about the decision to think about intramuscular prep here. Is it more driven by yearly dosing versus intramuscular because like initially, we thought that subcu would be the preferred choice, but then in terms kind of like some doctors [indiscernible]. So like what are you seeing in the marketplace? Or is there any reason to believe intramuscular [indiscernible] is more suitable for a longer acting cap?

Yes. I think more broadly in HIV it is really about optionality, right? And you find people who are very informed about both treatment and prevention and who have clear preferences, right? And for us, in prevention, it's really important to be a leader in the prevention market. And we achieved that by having those different options. We see Descovy with really stellar growth rates as a daily oral option for prevention. We see the prevention market growing, right? We think it's underpenetrated at this point. We have more than 500,000 people on prep as the addressable patient population, the patient population that the population of people qualifying for PrEP should be more like 2.2 million, right? So we feel there's a real growth trajectory and obviously, Descovy playing a key role as a daily option, then yes, to go as a once every 6-month subcutaneous option. We have filed for a weekly option weekly oral lenacapavir as an option. We hope for approval of that in the beginning of next year, first quarter of next year. And then we have a clinical trial ongoing for the Yeztugo as an injectable once every year. That type of optionality we feel is really important. And when I go out, when I talk to people at sites, for example, there's a real excitement about the once every year. People go, "Oh, this is like a vaccine. I can go in like once a year and can get my shot and really have the effective prevention that I know from Yeztugo." Yes, you're right, that's an intramuscular injection. Some people prefer that. Some people prefer the subcutaneous, which is Yeztugo once every 6 months, right? Other people don't want injections at all, that's whether weekly then [indiscernible] would come in or the daily Descovy. So having that optionality, we feel is really important.

Got it. That makes sense. And then for Yeztugo, these different approaches intramuscular or overall, you are taking the PK/PD type approach here rather than a full trial. So talk a little bit about if you can talk about regulatory discussions for the oral filing and -- should we see this filing as risky per se because it doesn't have a clinical proper Phase III clinical trial behind this? Or do you think PK/PD is enough pace on your discussion here?

So in our experience, the FDA is really kind of a trailblazing agency in this field. has been very interested in model-informed drug development and very interested in kind of exposure effect relationships, right? One of the beauties of virology development is that you can very effectively model the type of coverage you need in order to both prevent an infection and also in order to treat the virus. So now in the prevention setting, you've got 2 different things, right? You've got the lenacapavir weekly. That's where we've already submitted for approval. That submission is entirely based on 2 things. One, the modeling, right? The model informed drug development, really understanding the PK but second, also the experience we have with Yeztugo. Because remember for Yeztugo, we already have a bridging option, which is an oral therapy that you can give weekly that can bridge. For example, if somebody misses their once every 6-month Yeztugo injection. They can go and take the pills for a couple of weeks and then go to the next injection. So based on that experience and that label that already exists, it was also -- it was only a smaller step to then get to the weekly lenacapavir prevention option, like the entire weekly oral option. So I don't look at this as a riskier than any other type of submission. Obviously, we had extensive discussions with FDA. Obviously, I will not comment on what FDA will do right, but we are in active discussions with them about that. And I'm really encouraged by the experience that we have with Yeztugo with a bridging option already and then the PK data. And then for the once every year treatment, you're right, that is a Phase III study. And that Phase III study has eventually a PK primary endpoint. So it's really about getting to those lenacapavir systemic levels in circulation that we know will effectively prevent, right? So we want an effect that's similar to what we've seen with Yeztugo once every 6 months. And we know with the dose that we use in the once every 12 months, we get very similar or even higher levels of lenacapavir in circulation then we get with the once every 6 months. So we're very confident about the target coverage and very confident about that preventive efficacy. So we're really looking forward to seeing the data sometime next year.

Got it. Exciting. Thank you for that. So now let's just switch to treatment a little bit. I think earlier this year, you showed every [indiscernible] data because I think you have -- like you need multiple draws, you already have one drug, which can be every 6 months or maybe every year with the intramuscular delivery, but you need an integrated inhibitor to combine with that. So the one you are taking forward is -- I think we have seen data for every 4 months. Now what are we -- so like what profile do you want to see? Do you -- it has to be every 6 months or it can be every quarter? Like how do you think about the next generation of HIV?

Yes, great question. And there are some really important points that you mentioned already. So first of all, again, the same component of optionality and really having different offers for patients becomes important here in the treatment setting, very similar to the prevention setting. You want to have like your daily, your weekly, monthly once every 6 months, right? You want to have that type of optionality. How do we get there? On the treatment side, we always need combinations, right? You've got a higher viral load, so you always need combinations. That's one important component. And the other important component is Biktarvy has set the bar so high, right? From an efficacy perspective, from a perspective of forgiveness, if you miss a dose from perspective of resistance, that, that becomes your goal standard. So we don't want to compromise on that type of profile, right? So that's very similar to -- that then gives you really what you want to see with, for example, you want every 6 months, right? You want a high level of efficacy. You want a really positive profile when it comes to resistance, right? You don't want to see a lot of resistance development. You want a high level of convenience as well, right? So you want to have these really good characteristics. And you need the combination. So when we think about once every 6 months, we have one component of the combination already, which is lenacapavir, right? Lenacapavir, is already approved as a once every 6-month treatment called Sunlenca, which is for the highly treatment-experienced patients in combination with other antiretrovirals but we want to once every 6-month treatment approach that, for example, has an integrase inhibitor. That's we're working on the combination of a long-acting integrase inhibitor, which is called 3242 -- GS-3242. That's the integrated component plus lenacapavir every 6 months. We're working actively on that. We know already that the integrase inhibitor, 3242 can cover for 4 months, right? We're doing that. We're exploring that in a dose escalation study. And just from a PK perspective, you need these higher doses to then cover the longer period in time, right? We're confident that we can get to once every 6 months with 3242 but that's current ongoing area of study. We'll know that roughly by the end of the year, and then we'll move that combination into Phase II to get to [indiscernible] every 6 months treatment with an integrase inhibitor and a capsid. And again, what we're really looking for is high level of efficacy, low level of resistance or no resistance right, and then the type of forgiveness and convenience that we see with a drug like Biktarvy.

Got it. Very, very helpful. So maybe let's just move on to anito-cel a little bit here, right? I mean, so now a PDUFA is coming as well. The question we get a lot and is that like me, like, as of now, it does look -- the safety is the differentiation versus CARVYKTI at this point. How comfortable you are that we really know the profile of the drug that we are not going to see a delay in neurotoxicity here or anything in subsequent data set or like obviously, mechanistically, there's a reason there. But again, what do you say to someone who says like, oh, it does take 1 or 2 cases and probably -- or you say that probably you're not going to see those cases at this point?

Yes. So you're talking about exactly the safety profile from a differentiation perspective, we've not seen the, for example, the delayed neurotoxicity, the Parkinsonism, the [indiscernible]. We've also not seen the enterocolitis, for example, that some of the competitor products have seen. We think that's really based in the mechanism and the on-off characteristic at the receptor and the inflammatory conditions that, that can raise with some of the competitor molecules. The key argument, I think, is the time line, right? Those types of side effects with the competitor profile -- with the competitor drugs, have been seen within the first 100 days usually after treatment. We now have north of 400 patients who have been treated with a net or cell with observation periods, like one data set with the median observation period of like 15 months, another one took patients all the way out to 38 months, right, after treatment and we have not seen a single case so far of either the delayed neurotoxicity or the enterocolitis we should have seen those. You've got very substantial numbers of patients that have gone through those first 100 days. So I feel very encouraged by that. right, that the safety profile is really differentiated versus some of the other treatment approaches out there, where you see rates all the way up to 10% of these long-term irreversible side effects. And that's where people are really concerned about those, and we see a clear differentiation and a clear opportunity, right? Besides that, obviously, you want to see really good efficacy and that's also where I'm very encouraged by the objective response rate, the PFS data that we've seen and also the MRD data, the minimal residual disease data that we see that really predict like strong long-term outcomes with the needle cell.

Got it. Very helpful. Thank you for that. I want to move a little bit on I&I. The exciting area where you do not get any credit right now, but again, everybody is looking forward to those data sets both for IRAK4 and alpha-4-beta-7. So talk a little bit about that. I mean this is a new area for you as well. So for you, there has to be a bar for you to move forward. So how you are thinking about when you look at the data, what would make you make a go/no-go decision on those assets here?